Methodenstreit

As Senior Methodenstreit of political economy a dispute is referred to, in which it was about the importance of inductive and deductive research methods for economics. The dispute was mainly conducted in the 1880s and 1890s in the German-speaking world between the marginal utility school and the Historical School of Economics. This meaning is the younger Methods dispute in which it comes to the admissibility of value judgments in economics.

The Germanism " methodological dispute " has prevailed in many other languages ​​to refer this dispute.

Content

Gustav von Schmoller, a leading representative of the younger Historical School argued that there is no immutable laws of human action ( irrationalism ). The primary object of investigation of political economy, the society is as a whole ( Methodological collectivism ); but these and the processes are in location-and time-dependent and in constant change ( relativism ). Is the task of the economist is to develop scientific findings from empirical and historical research by induction. Primary deductive research held Schmoller makes little sense, because ideological thought patterns influenced the result. Similarly, concrete problems could only be understood against the background of the specific circumstances of an economy (eg social structure, economic and political constitution ).

The Viennese economist Carl Menger, however, kept the study of individual human action ( Methodological individualism ) for the right starting point of economics. Through theoretical deduction are starting from the principle of utility maximization indeed universal and immutable laws of human action derivable ( existence of " absolute " truths ). The task of economists to recognize these by theoretical analysis ( rationalism ). Thus, the economics as an independent and accurate of the science of history science is possible.

Schmoller was particularly critical Menger's " singular considerations " of the phenomena of value and price formation, money and income distribution, the constitutive relationship would be lost to the institutional framework of moral and legal. He admitted that all the " perfect science" deductive, the political economy was by Schmoller assessment not yet progressed far enough so that he continued to hold an increased use of inductive methods necessary but.

Effect and result

In the literature, Schmoller is sometimes accused of hostility to theory and argue that Schmoller's aversion to the theoretical operation delayed the advance of the theoretical analysis in Germany and had thereby slowed the economic progress of knowledge. Others see the proceedings as a whole as crippling, since this rather academic power politics have served as the transport epistemological insights. So be it also Menger never been able to be adequately justified its position need of a pre-existing theory for the observation of reality. His attitude also pointed to the danger of the independence of the "exact" theory, which only allows a falsification of hypotheses on the basis of their internal logic.

The dispute was significant especially for the Austrian School, which in the first place was constituted in the history of the dispute, as Eugen von Böhm- Bawerk supported views and Friedrich von Wieser Menger. The term "Austrian school" was only coined during the altercation and was originally used as an insult on the part of the historicists, to underline the supposed provincialism of the Austrians. But this took it over later.

The methods of dispute was essentially limited to Germany. Today, the dispute is over. As international practice, both the inductive historical, as well as the theoretical deductive method can be used in conventional economics. Both methods have their place.

Swell

• Economics
• Scientific controversy